On a small, quiet street in Sebastopol, in a neighborhood better known for its eclectic sculptures than for early adopters of the hottest technologies, residents are surfing the Internet at some of the fastest speeds available in the country.
Sonic.net, the Santa Rosa-based Internet provider, has strung a network of fiber-optic cables delivering Internet speeds up to 1 gigabyte per second, about 100 times faster than most household Internet connections.
The company is expanding the network's reach to about 700 homes in Sebastopol within the next month, and plans are underway for a total of 2,000 Sebastopol homes and a similar number in San Francisco over the next few years.
So far, about 60 Sebastopol households are online with fiber, and Sonic.net is asking roughly a quarter of the price charged by its competitors, which include national giants like Verizon and Comcast.
The hometown company's pioneering strides in high-speed Internet are welcome in a market where the U.S. lags behind other countries in speed and affordability.
The higher speeds enable video conferencing, telemedicine and — perhaps more importantly — faster downloading and smoother viewing on websites like Netflix and Hulu.
Sebastopol is just the beginning, and where the company brings its fiber next will depend on how the product is received, said Dane Jasper, co-founder and CEO of Sonic.net.
"If we find that consumers take it up, then we will use that as a guide for our continued investment in the fiber network," Jasper said. "We have to think about, how are we going to get more people on board with this? And we want to remove any barriers that we can."
Founded in 1994, Sonic.net has grown into the largest independent Internet service provider in Northern California, with more than 40,000 customers, Jasper said. The company has 150 employees, up 50 percent from last year, Jasper said.
Today, Sonic.net provides services in cities throughout the Bay Area, and is continuing to expand its reach by building its copper broadband network in communities around Sacramento and Los Angeles.
Its annual revenues in 2009 were $21 million — up about 23 percent from the year before. Jasper declined to release current revenue figures, but said both revenues and customers grew by about 25 percent from 2010 to 2011.
One of the barriers to fiber expansion is the construction cost. Stringing fiber over power lines, Sonic.net spends about $500 per home that it passes, Jasper said. In Sebastopol, when construction began, about a third of households were Sonic.net customers. If those customers switched from copper broadband to fiber — a likely scenario considering the pricing and benefits — Sonic.net would have effectively spent $1,500 per customer to offer the fiber service.
Despite these costs, there are some savings when customers switch from the copper broadband network to fiber. In many cases, Sonic.net leased the copper from incumbent operators like Verizon and AT&T, at a cost of about $20 per month.
"We will go door-to-door and ask those people to become customers, and if the economic model works, we're shedding the costs of the copper products," Jasper said.
That's part of the reason Sonic.net offers far lower rates than its competitors. The fiber Internet at 100 Mbps costs about $40 a month, and includes a home phone line with unlimited national calls. The 1 GBps speed option costs about $70 per month.